With COVID-19’s impact on daily life greatly diminished, student loan borrowers whose repayments were paused due to COVID-19 may be considering their options for resuming payments on this life-altering debt. This may lead some borrowers to look into debt consolidation, but it’s important to research these options carefully and not give in to the temptation to seek a quick fix that could turn out to be a scam.
After recent action by the Biden administration, federal student loan payments remain paused interest-free through Dec. 31. In addition, borrowers earning less than $125,000 a year are eligible for up to $10,000 in loan forgiveness, with borrowers who also received Pell Grants able to receive up to $20,000 in forgiveness. Consumers should be on guard against scammers taking advantage of the news by offering phony means of claiming loan forgiveness.
Better Business Bureau Scam Tracker received more than 500 reports of debt relief and credit repair scams in North America in 2021. These scams cost consumers a reported total of more than $283,000, with the median consumer losing $600. Most commonly, these reported scams involved payment by bank account debit.
Up-front fees, including fees to enter a repayment plan, are a common thread among debt relief scams. These up-front fees are illegal. Help…
